Use of online booking systems by U.S. businesses last year increased and spread across the board, with many corporate travel buyers from small, midsize and large companies alike reaching company thresholds for online booking adoption and looking to the next technological frontiers, including expanded global online booking, meetings management and full systems integration.
"Everyone's striving to achieve not only higher adoption, but higher rates of touchless transaction processing. They're also looking for it to integrate with their accounting systems as much as possible," said Bob Lichtman, partner with Menlo Park, Calif.-based consultancy The Corporate Solutions Group. Another logical next step for companies that have hit a U.S. online booking adoption ceiling, said Lichtman, is to adopt a more global approach to travel technology. "Companies have been trying to go global with their tools but it's a challenge in a lot of locations where they're not so keen to go online," he said. "There's still resistance in some regions and there are some places where it's just less expensive to go through an agent."
Of the 100 companies with $33 million or more in U.S. booked air volume represented in Business Travel News' 2005 Corporate Travel 100
(BTN, July 4), 84 percent reported using a company-approved online booking tool in the United States in 2004. U.S. booking tool use also spiked in the midmarket—companies with air spend between $2 million and $12 million—with 76 percent of the 320 respondents to BTN's annual Midmarket Report
(BTN, June 20) reporting that they either had already bought, or will by year-end, an online booking tool.
Outside the United States, it is a different story, with bookings going through such a tool less than 25 percent of the time today in Latin America, Mexico and Asia, according to BTN's 2005 CT100 benchmarking study of 76 companies, 62 of which reported U.S. booked air volume in excess of $30 million.
Less than half of companies were booking travel online in Canada and Europe last year, but this year the number of companies booking in those countries has risen to a clear majority of the CT100.
Today, with online tools also achieving critical mass in the midmarket, it's not just the large-market accounts that have their eyes trained on making global online booking a reality, said Terry Sullo, manager of travel and meeting services for Cambridge, Mass.-based technology firm Akamai Technologies. "Getting everyone doing the same things globally is a focus," she said. "I'm piecing it together myself now. It's much more possible today than it ever was. The cultural conflict in certain regions is the biggest piece of it."
Sullo also noted that small and midmarket companies like Akamai, which books about $3 million a year in domestic air volume, may not be the earliest adopters of global online booking technology, but may be quicker to adapt to the travel management strategy. "It's easier for a midmarket account than a huge-market account to do it because they're more nimble. Their corporate cultures work faster," she said. "When you have companies with vast numbers of people and historical processes, it takes longer to change."
Most online booking providers agree that going global online is a realistic goal for companies of all sizes, but offer certain caveats to corporate travel managers looking to expand their capabilities. "Being global doesn't mean necessarily offering the same product with the same functionality," said American Express Corporate Services president Ed Gilligan. "That you can't do, but you can offer them alternatives. In China, we do have an alternative—working with local technology—to offer some basic online booking. We do have some basic things in place across most of the markets we're in, but they're at different stages of evolution."
Meetings management has emerged in recent years as another area for travel managers and online booking providers to tackle together. BTN's benchmarking survey revealed that corporate travel buyers are virtually split when it comes to meetings management, with 47 percent of the 76 large respondents claiming to have centrally consolidated meetings management or purchasing programs. Among midmarket companies, 74 percent said they were managing meetings spend in 2005, a substantial increase over the 54 percent that made that claim in 2004.
Deb Vasseur, travel and meetings manager for Seattle-based Starbucks Corp., currently maintains more than 65 percent online booking adoption through Expedia Corporate Travel, but said taking group and meetings travel out of the mix would increase adoption to more than 80 percent.
"We're growing so fast, we feel like we're on a treadmill some days. One of the things that's really important to us right now is meeting and event planning and we're looking at some technologies to help us both drive out cost and streamline the process," Vasseur said. "We worked with our finance team in collecting data regarding meetings—where they're happening, how we're spending—for the first time. We recently brought OnVantage on board and we're looking forward to automating even more of the group travel booking process. It gives us a lot of leverage with suppliers. If our agency can do for us on our group travel what they've done for us on the transient side, we'd be thrilled," Starbucks' Vasseur said.
Suppliers also recognize the importance of ramping up the technology offerings available in the meetings management space. "We're really seeing that meetings is a huge opportunity for continued adoption and continued savings," said Bev Heinritz, vice president and general manager of GetThere.
"Somewhere between 70 and 80 percent of a company's meetings are ad hoc meetings. A lot of companies are very seriously looking at implementing DirectMeetings products. We've probably tripled our DirectMeetings implementations in the past three months," Heinritz said.
In addition to focusing on global and meetings strategies, some providers are looking at full systems integration as the next frontier of online booking. Respondents to BTN's survey of large-market companies reported filing an average of 87 percent of expense reports online in 2004, an increase from 74 percent in 2003. Midmarket companies lagged slightly, but also appear to be ramping up integration efforts, filing an average of 54 percent of expense reports online in 2005, an increase from 41 percent the previous year.
"One significant trend that's coming is complete integration of the corporate credit card, online booking and expense reimbursement systems," said Thomas DePasquale, CEO and president of online booking and expense provider Outtask Inc., adding that concerns about Sarbanes-Oxley requirements and corporate governance are driving technological change. "This whole area is going to be incredibly important, especially as the online tool becomes more of a procurement environment. Customers are looking for full integration around control of travel and expense through booking all the way through reimbursement, to try to take the fingerprints out of it and make sure there are no mistakes."